TV clips showed the same smiling face, both at the time of entering the jail and while coming out 16 months later. For, YS Jaganmohan Reddy knew the future could never be too grim for him.

He has 17 assembly seats and a solid political base built mainly in the Seemandhra region by
his father, YS Rajasekhara Reddy, the redoubtable Congress leader and chief minister of Andhra Pradesh who died in a chopper crash in 2009.

He was back in business within hours of his release on September 24, aware of how crucial he was to the YSR Congress when Andhra Pradesh is boiling over the Telangana issue.

Jagan, as he is popularly known, had carefully played his cards on Telangana. Only when the Congress working committee passed a resolution on July 30, demanding the creation of a separate state of Telangana, did Jagan's party quickly launch a struggle for a united Andhra.

Now at 41, Jagan is all set to take over as the driving force behind the agitation against the separation of the state in the coastal Andhra and Rayalaseema regions, known as Seemandhra.

The Congress, however, is seeing a silver lining in Jagan's surge, as his family members and colleagues have repeatedly said the YSR Congress would not align with communal forces.

YSR Congress sources said Jagan has chalked out an elaborate plan for Telangana and would spell it out at an appropriate time. For now, he has decided not to press for acceptance of the resignations of his MLAs to ensure the defeat of the Telangana resolution.

His release is likely to dent the political fortunes of his arch-rival and Telugu Desam Party chief N Chandrababu Naidu in Seeamandhra, while the Congress and the Telangana Rashtra Samithi hope to benefit from bifurcation. Naidu has lost too much ground due to his constantly changing stand on Telangana.

Not unexpected, but the state seems to have been divided into Telangana and Seemandhra even before the official bifurcation. Observers say the YSR Congress is likely to win around 21 of the 25 seats from Seemandhra in the 2014 Lok Sabha elections, while the Congress-TRS combine may corner 10-11 of the 17 seats in Telangana. Andhra sends 42 members to the LS.

Similarly, the YSR Congress, according to analysts, may get around 130 of Seemandhra's 175 assembly seats while the Congress-TSR - in the case of a merger or an alliance - are expected to win around 80 of the total 119 seats.

The analysts also give the TDP around six LS seats and 40 in the assembly. The assembly polls will be held simultaneously with the Lok Sabha elections. Now, Naidu has no option but to strike an alliance with the BJP.

His party thinks that the alliance will help consolidate the backward caste vote and the combine could emerge as a formidable force in Telangana.

What's more, Jagan's release has pushed the TRS to seriously consider either a merger or an alliance with the Congress. The TRS, political observers say, cannot go for the BJP as it has a substantial Muslim vote-bank in Telangana.

Jagan's release has also blocked the purported move by some top Congress leaders from Seemandhra to form a new political outfit. "The exodus from the Congress may stop now as Jagan is not going to accept people randomly from other parties," a YSR Congress leader said.

Hard to believe, but the Telangana deal has no absolute loser - so far.